What should you do if you can’t pay your electricity bill? 

Man and women looking at electricity bill

Nobody likes getting a bill they can’t afford, but if it happens to you, the most important thing is that you don’t just ignore it and hope the problem goes away. (Spoiler alert: It won’t.) If you address the problem directly, you’ll find there are some straightforward solutions. 

So here’s what you can do to get your bill back under control.

Talk to your energy retailer 

If you don’t think you’ll be able to pay your bill, the first step is to talk to your electricity retailer. That bill might seem intimidating, but you’ll be surprised by how much it helps to simply pick up the phone and explain your situation. 

If this is the first time you’ve had trouble paying your bill, your retailer is likely to grant you an extension of a week or two. If it’s not the first time, or if you know that brief extension won’t help, they’ll discuss your payment options with you in more detail. 

If you’re struggling, your retailer will likely connect you with its hardship team, who can provide additional support based on your circumstances. Under the National Energy Retail Law, your retailer is obliged to assist you if you’re having payment difficulties, and must make an effort to help you before they undertake disconnection of your home. 

Each retailer has a hardship policy for situations like this. You can find your retailer’s policy, which will outline how it can assist you. If you’re a commercial and industrial customer you’ll need to talk to your account manager – the hardship policy won’t apply to your situation.  

Negotiate a payment plan 

If a short extension won’t be enough, your retailer is required to give you the option of paying your bill with a payment plan. 

You and your retailer will agree on a schedule that will see you pay off your energy bill in regular instalments. The key is to be honest about the instalment amount you can afford – it’s important that you don’t agree to a payment plan you won’t be able to keep up with.

If you fail to meet the payment plan conditions twice in the space of a year, your retailer won’t be obligated to offer you a new plan, and you’ll run the risk of going into debt and being disconnected. 

Ask about concessions 

Your retailer should also be able to give you information about the availability of government assistance, in the form of energy concessions or relief schemes. 

You might be eligible for concessions if, for instance, you’re unable to work, your household earns a low income, you’re on a pension, or you have a medical condition that requires you to use electricity for particular medical equipment. 

In Queensland, the Home Energy Assistance Scheme is a one-off emergency assistance payment of up to $720 (once every two years) for households who are unable to pay their bill because of an unexpected financial crisis. Your energy provider will start the application process for you, and provide you with the application number you need to complete the online form

Queenslanders can find out if they meet the eligibility criteria for a variety of concessions by calling 13 QGOV (13 74 68) or visiting campaigns.premiers.qld.gov.au/smart-savings/. Australia-wide, you can find what’s available to you by visiting energy.gov.au/rebates

Change your payment arrangements 

Once you’ve figured out how you’re going to pay off this bill, you can ask your retailer what you can do to avoid a big bill next time. 

You might be able to change your payment arrangements so you can pay smaller amounts more often, helping you to avoid building up a big debt and making future bills easier to manage. 

If you receive Centrelink benefits, you can ask your retailer about Centrepay, a free and voluntary service that gives Centrelink permission to deduct energy bill payments directly from your Centrelink money before you get it. 

Contact a free financial counsellor 

If you’re having financial difficulty, you can also talk to a financial counsellor. It’s a free, independent and confidential service – they’ll listen to your story and use their expertise to help you understand your options. If necessary, they can also talk to your retailer on your behalf. 

To get in touch with a fully qualified financial counsellor through the National Debt Helpline, call 1800 007 007 or visit ndh.org.au/talk-to-a-financial-counsellor/find-a-financial-counsellor/

Will my power be disconnected? 

Your retailer does have the power to disconnect your property but only as a last resort. 

According to the guidelines set by industry regulators, your retailer cannot disconnect you if you are taking part in a hardship program and following your payment plan. If you aren’t doing that, your retailer can disconnect you, but it can’t do it without warning – there are a few steps they need to follow first. 

Before they can disconnect you, your retailer must: 

  1. Send you a reminder notice to alert you that you need to pay an outstanding amount. 
  2. Send you a disconnection warning notice to advise you the energy supply at the property will, or may, be disconnected. 
  3. Try to talk to you before disconnecting your energy. 

There are also a number of circumstances under which a retailer can’t disconnect your energy. You can’t be disconnected on: 

  • A business day before 8:00 am or after 3:00 pm 
  • Friday to Sunday
  • The day before a public holiday
  • A public holiday
  • The days between 20 December and 31 December (inclusive). 

You also can’t be disconnected under extreme weather circumstances.  

That said, we’re not advising that you try to take advantage of these circumstances with your retailer. Your best course of action will always be to simply contact your retailer and follow the plan that you agree on.

Keep in mind that even if you’re not disconnected, there may be other consequences to not paying your bill. If you have a direct debit set up to pay the bill and not enough money to cover it, for instance, you might go into an unplanned overdraft, which will incur a fee from your bank. 

Failing to pay your bills on time could also harm your credit rating, which will make it more difficult for you to apply for loans and credit in the future. 

And if you’re on an energy plan with a pay-on-time discount, failing to pay on time will mean you’re likely to lose this discount and have to pay more in the future. 

If you can’t agree with your retailer on a payment plan you can contact the Energy Ombudsman for assistance. In Queensland, you can do this by calling 1800 662 837 or visiting ewoq.com.au; for other states, visit energymadeeasy.gov.au to find your Ombudsman’s contact details. 

Finally, remember that if you live in South East Queensland or many other parts of Australia, you’re not locked in to getting your power from your current retailer. If you can’t come to an arrangement with them that will work for you in the future, don’t be afraid to shop around for a better deal – because there’s no need to pay more for your utilities than you have to. 

Want to lower your next energy bill? Check out our guide to reducing your electricity use and lowering your power bills.